Professional
907 Points
Joined March 2008
Any tax paid to the VAT dept on purchase of goods from an Unregistered dealers is considered as Purchase tax.
This purchase tax concept behaves differently as per State VAT Act and Rules.
For example, In Karnataka, Unregistered Dealer purchases will be considered as Sales Turnover. Also when such purchases are made, purchasing dealer has to pay tax (purchase tax) to the dept. Later to the extent of such goods sold dealer can claim Input tax credit.
Subramanya